Jason Miller, executive editor, Federal News Radio

When it comes to fiscal 2013 budget requests, the key word is revision. But for the 2012 budget, agencies have a different point of view: confusion.

"We have absolutely no idea of what our budget will look like and I don't think anyone does," said Jim Taylor, the Labor Department's chief financial officer. "We have a number of offices that have had to go back and restructure their budget because they were confused because we didn't have a 2011 budget, 2012 is up in the air and now we are looking at 2013. So to figure out what we will be asking for a year-and-a-half from now, you have to make a lot of assumptions. You have to be very structured and very disciplined."

And now the Office of Management and Budget is asking agencies to revise their 2013 requests to cut 5 percent in discretionary spending and offer ideas to cut at least another 5 percent.

Not across-the-board cuts

"This does not mean that we will institute either a 5 percent or 10 percent cut in an individual agency's budget or in all agency budgets," wrote OMB Director Jacob Lew in a blog post. "We asked agencies to provide these two options so that the president can have the information needed to make the tough choices necessary to meet the hard spending targets put in place by the Budget Control Act [the debt ceiling deal] and to meet the needs of the nation. We do not believe in making across-the-board cuts; rather, we believe that we should cut what is wasteful or not essential and invest in what is critical to long-term growth and other priorities. Thus, some agency budgets will decrease (and some more than others), some will stay flat, and some may increase (and, again, some more than others) — and the same goes for programs within agencies."

Many agencies had already submitted their 2013 request to their chief financial officers for review.

"The hard thing for us right now is where we are in time. We're very close to the very end of fiscal 2011. We have bills pending in both chambers for fiscal 2012. Those bills were based on a very different assumption on what the defense top line would be," said Erin Conaton, the Air Force's undersecretary and chief management officer, at a panel discussion this week with military CMOs. "You've got 2011, 2012 and 2013 budgets all coming together, but under very changed circumstances. We are working away through what the first tranche of reductions will look like."

The Air Force is struggling, she said, because it knows only what round one of cuts look like and aren't sure whether round two would happen or, even, what it could look like.

"How do you think about shaping your force if you are planning for a $400 billion reduction or something much larger than that?" she said.

Under pressure

DoD isn't the only agency or department under budget pressure. Every civilian agency expects 2012 and 2013 discretionary spending to go down by more than the 5 percent OMB is asking for.

The House has passed six 2012 appropriations bills, while the Senate has passed only one.

In the House version of the Commerce, Justice and Science appropriations bill, funding is down 6 percent from last year and is 13 percent less than the president's request, according to a committee release.

Energy and Water and Related Agencies Appropriations bill would drop funding to $30.6 billion — $5.9 billion below the President's request and $1 billion below last year — which brings the total cost of the bill to nearly the 2006 funding level, the committee stated.

The signs coming from the House and now OMB when it comes to agency discretionary spending are forcing agencies to focus only on priorities.

"It has forced the department to be very aggressive in priority setting and establishing what we really need to do," Taylor, Labor's CFO, said. "We literally have to identify what our core mission requirements are. As we go through our budget process, [this is] the structure we put on it: Does the budget reflect what our priorities are? The reasons we feel like we are and, if not, we realign it. We don't want to play the budget games where [you say] 'Okay I know that you like this so I'll offer it as a cut, and I know you will not take it.' Those games are over for most of us. You really have to identify your core mission and have to be aggressive in aligning your budget priorities to that core mission."